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Switzerland, Italy Join Congressional Watch List on Piracy for First Time

Ramzi Haidar/AFP/Getty Images

The annual report notes progress in China and Russia, but says they still are not doing enough to enforce laws that protect intellectual property.

For the first time, Italy and Switzerland have been placed on the list of nations -- released annually by the U.S. Congressional International Anti-Piracy Caucus -- that do not adequately enforce copyright laws.

The report released Thursday says that while this is the first time Italy and Switzerland have been on the list, along with China, Russia and the Ukraine, “insufficient protections for copyright are a longstanding problem in both nations.”

The report also highlights progress on the issue in Canada and Spain. Instead of being on the list of offenders, those two are mentioned as being in transition after they took, according to the report, “positive steps toward putting in place a stronger legal framework for the protection of copyright.”

Created in 2003, the Congressional International Anti-Piracy Cause is made up of more than 65 members of Congress. They seek to spotlight countries where the amount of piracy is “alarming,” in terms of providing protections for copyright dependent industries such as movies, home video, TV, music, books, video games and computer software.

In the past, much of the piracy was about physical goods – illegally reproduced DVDs, for instance. These days, the focus has shifted to also include online piracy, which the group says is responsible for “wholesale theft of American intellectual property.”

Here are updates on the countries considered the biggest offenders:

CHINA – While the Asian giant has made commitments to address continuing problems, the report says piracy there still inflicts “severe harm on American and Chinese creators.” The report notes the entire recorded music business there was worth $82.8 million in 2011, while in Thailand, a much smaller market, it was $68.9 million. They put piracy rates for software at 77 percent of the entire market, with the unlicensed software sold worth nearly $9 billion annually. The report notes there is progress regarding some specific websites, such as an agreement between rights holders and Baidu, China’s leading search engine, and a commitment by online retailer Taobao to strength measures to prevent piracy.

RUSSIA -- International film sellers note that sales of movies and TV shows to China and Russia are up in the past few years and they are getting more money out of those territories, especially Russia. However the report says Russia still lacks “appropriate IP protection” and “continues to allow for rampant Internet piracy affecting the global market. The report notes that with Russia joining the World Trade Organization, “it is particularly important that the Russian government take prompt action against the notorious sites” which have been identified.

ITALY -- The problem in Italy is that efforts by some legislators to pass laws and create a legal framework to deal with piracy have repeatedly failed. “Italy’s regulatory communications authority (AGCOM) was unable to pass much-needed reforms to combat piracy,” says the report, noting that without such reforms “the widespread perception will endure that illegal downloading is not harmful.”

SWITZERLAND -- While it is known as a law-abiding country, Switzerland makes the list because “copyright laws are inadequate,” says the report, and need to be updated to enforce laws against digital piracy. “Until these changes are made,” adds the report, “Switzerland will continue to be a magnet for rogue sites.” The report calls on the Swiss to “fulfill its obligations under the WIPO Internet Treaties and other international copyright norms.”

UKRAINE -- This country, says the report, is a hub for infringing content through peer-to-peer networks and hosted websites, and is home to one of the worlds mot notorious pirate markets EX.ua. The situation appears to be worsening. Industry supported efforts to build a legitimate online market have been challenged by government authorities and the limited enforcement efforts against rogue website have lacked any substantial effect.”

Here are some statements issued Thursday in the wake of the report:

Michael O’Leary, Senior Executive Vice President for Global Policy and External Affairs of the Motion Picture Association of America, Inc. (MPAA): “As technology evolves and we transform the way we enjoy content, it remains important to protect our exports and ensure that hard working creators are compensated for their work. We believe governments around the world share our admiration of the original work created by the film and television community, and we hope all countries identified today will take the important steps necessary to protect this work from online theft and foster legitimate online commerce.”

“Whether it is movie makers, music producers and app makers to entrepreneurs creating the newest must-have gadget, our economy is based upon the principle that property should be respected -- not stolen --and this right does not end at the water's edge. This is not only fair, but it is good economics,” said Rep. Adam Schiff (D-CA). “That’s why we started the Watch List – to alert those pirates and the countries helping them that we are paying attention and we expect our trading partners to protect the intellectual property rights of creators. Our creative industries employ millions of Americans and are some of our most competitive exports. All we want is a level playing field where all nations live up to their obligations to protect intellectual property and enforce existing laws.”

“The recognition of an author’s ownership in an original creative work is one of our legal system’s core principles,” said Rep. Bob Goodlatte (R-VA). “If we allow people to take that work without paying for it, artists will no longer have any financial incentive to create new movies, software, video games, books and music. The end result is the loss of billions of dollars in revenue for the U.S. each year and even greater losses to our economy in terms of reduced job growth and exports. While the U.S. is the world’s leader in intellectual property protections, the problem does not stop at our borders. The only way to ensure the full protection of Americans’ creative works is to actively encourage other countries around the globe to enact and enforce strong intellectual property laws.”

“Innovation, hard work, and creativity long have fueled the American dream and are the reason for the continued worldwide demand for American movies, music, books, and software,” said Senator Sheldon Whitehouse (D-RI). “Theft of our intellectual property undercuts the hard work of Americans in these industries and the U.S. economy as a whole. Our trading partners must ensure that American intellectual property is appropriately protected.”

“I wish it could be said that the 2012 International Anti-Piracy Watch List contained some promising news,” said Senator Orrin Hatch (R-UT). “Unfortunately, this year’s Watch List confirms that copyright piracy continues to spread at an alarming pace. Our copyright laws are designed to encourage the creation of new works that inspire and delight us. Conversely, IP piracy takes something for nothing – representing the largest transfer of wealth in history. Over time our artists may simply choose not to share their talents and creations with us. And who can blame them, especially if we cannot protect their intellectual property rights? This is a global cause worthy of our best efforts.”